Citation Nr: 9909849
Decision Date: 04/08/99 Archive Date: 04/22/99
DOCKET NO. 99-02 132 ) DATE
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THE ISSUE
Eligibility for payment of attorney fees from past-due
benefits.
ATTORNEY FOR THE BOARD
Daniel R. McGarry
INTRODUCTION
This matter relating to attorney fees arises from a rating
decision of the Department of Veterans Affairs (VA) Regional
Office (RO) in Nashville, Tennessee, which resulted in an
award of past-due benefits to the veteran.
By a decision in November 1995, the Board of Veterans'
Appeals (Board) denied entitlement to service connection for
tarsal tunnel syndrome, heel spurs, and osteoarthritis
secondary to frozen feet and denied an increased rating for
residuals of bilateral frozen feet, then rated as 30 percent
disabling. The veteran appealed that decision to the United
States Court of Veterans Appeals (Court). By an Order dated
in February 1997, the Court vacated the Board's decision and
remanded the matter to the Board for further development and
reconsideration. In January 1998, the Board remanded this
matter to the RO for further development and reconsideration
of the issues considered by the Board. In a November 1998
rating decision, the RO granted service connection for
bilateral tarsal tunnel syndrome and awarded a 10 percent
disability rating for each foot, effective from August 11,
1998. In the same decision, the RO awarded an increased
rating of 50 percent for residuals of frozen feet, with
osteoarthritis and heel spurs, effective from November 16,
1992 to January 12, 1998, and awarded separate ratings of 30
percent for each foot effective from January 12, 1998. The
RO also granted service connection for trimalleolar fracture
of the left ankle as secondary to service-connected
disability from residuals of frozen feet and awarded a
disability rating of 20 percent, effective from February 15,
1997.
By a letter dated January 27, 1999, the RO notified the
veteran and the attorney who had represented the veteran of
the payment of past-due benefits and the referral of the file
to the Board for a decision concerning the attorney's
eligibility for payment of a fee for his services from the 20
percent past-due benefits withheld by the RO. They were
given 30 days within which to submit to the Board evidence or
argument concerning payment of attorney fees. On March 2,
1999, the Board received a statement from the veteran in
which he requested that no attorney fees be paid from the
award of past-due benefits as the attorney had withdrawn from
representation prior to the award. On March 15, the Board
received a telefacsimile transmission of a letter from the
attorney in which she asserted that she was entitled to
payment of a fee from the past-due benefits withheld. The
question of whether such withheld benefits should be paid to
the veteran's attorney is now before the Board.
FINDINGS OF FACT
1. A final Board decision on a claim for service connection
for tarsal tunnel syndrome secondary to frozen feet and
entitlement to an increased rating for residuals of bilateral
frozen feet was rendered on November 7, 1995.
2. The notice of disagreement which preceded the Board's
November 7, 1995, decision was received by the RO in April
1993.
3. The Board has not promulgated a final decision on the
issue of entitlement to service connection for trimalleolar
fracture of the left ankle as secondary to service-connected
disability from residuals of frozen feet.
4. The attorney was retained by the veteran in September
1996.
5. The attorney filed a fee agreement with the Board in
December 1996 and July 1997.
6. Past-due benefits are payable based on the RO's December
1998 rating decision, which granted service connection for
tarsal tunnel syndrome secondary to residuals of bilateral
frozen feet and awarded a rating of 10 percent for each foot,
effective from August 11, 1998; awarded a 50 percent rating
for residuals of bilateral frozen feet, effective from
November 16, 1992 to January 12, 1998, and awarded separate
ratings of 30 percent for each foot, effective from January
12, 1998.
7. The total fee for the attorney's services is no more than
20 percent of the past-due benefits associated with the
claims for service connection for tarsal tunnel syndrome
secondary to residuals of frozen feet and increased rating
for residuals of frozen feet, and is wholly contingent on a
favorable resolution of the case.
CONCLUSIONS OF LAW
1. The criteria under which a valid fee agreement between
the veteran and his attorney as to representation before VA
and the Board may be executed have been met regarding the
attorney's representation in the claims for service
connection for tarsal tunnel syndrome and increased rating
for residuals of bilateral frozen feet. 38 U.S.C.A.
§ 5904(c) (West 1991 & Supp. 1998); 38 C.F.R. § 20.609(c)
(1998).
2. The criteria under which an attorney may be paid a fee
for services by VA from past-due benefits awarded for tarsal
tunnel syndrome and increased rating for residuals of
bilateral frozen feet are met. 38 U.S.C.A. § 5904(c) (West
1991 & Supp. 1998); 38 C.F.R. § 20.609(c) (1998).
3. The criteria under which a valid fee agreement between
the veteran and his attorney as to representation before VA
and the Board may be executed have not been met regarding the
claim of entitlement to service connection for trimalleolar
fracture of the left ankle. 38 U.S.C.A. § 5904(c) (West 1991
& Supp. 1998); 38 C.F.R. § 20.609(c) (1998).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
The applicable statutory and regulatory provisions stipulate
three criteria that must be met before an attorney or agent
may charge claimants or appellants for their services before
VA concerning claims for VA benefits. 38 U.S.C.A. § 5904(c)
(West 1991 & Supp. 1998); 38 C.F.R. § 20.609(c) (1998).
These criteria are: 1) promulgation by the Board of a final
decision with respect to the issue or issues involved; 2) the
NOD which preceded the Board decision with respect to the
issue or issues involved was received by the RO on or after
November 18, 1988; and 3) the attorney or agent must have
been retained not later than one year following the date that
the Board decision with respect to the issue or issues
involved was promulgated.
The veteran has provided the Board with a copy of The
Veterans Consortium Pro Bono Legal Program Agreement to
Engage an Attorney or Law Firm, signed by both the veteran
and the attorney in September 1996. In December 1996, the
Board received a copy of a fee agreement between the veteran
and the attorney, which was signed by the attorney in October
1996 and by the veteran in November 1996, concerning
representing the veteran before VA in the claims for service
connection for tarsal tunnel syndrome, heel spurs, and
osteoarthritis secondary to frozen feet, and an increased
disability evaluation for the residuals of frozen feet. The
agreement provided for the payment of a fee of 20 percent of
the total amount of any past-due benefits awarded on the
basis of the veteran's claim with the VA, to be paid directly
by VA from the award. The Board advised the RO to withhold
payment of 20 percent of any past-due benefits awarded
pending review of the attorney fee agreement by the Board.
In July 1997, the Board received another fee agreement,
signed by the veteran and the attorney in June 1997,
concerning representation of the veteran before the Board in
presenting his claims for tarsal tunnel syndrome, heel spurs,
and osteoarthritis, and for an increased rating for residuals
of frozen feet. This fee agreement also provided for the
payment of a fee of 20 percent of the total amount of any
past-due benefits awarded on the basis of the veteran's claim
with the VA, to be paid directly by VA from the award. The
Board again advised the RO to withhold payment of 20 percent
of any past-due benefits awarded pending review of the
attorney fee agreement by the Board.
I. Claim of Service Connection for Tarsal Tunnel Syndrome
and Increased Rating for Residuals of Bilateral Frozen Feet
With regard to the above-captioned claims it is clear that
the statutory and regulatory criteria for eligibility for
payment of attorney fees from past due benefits withheld have
been met. On these issues, the Board promulgated a final
decision on November 7, 1995. The notice of disagreement
which preceded the Board's decision with respect to these
issues was received by the RO in April 1993. The attorney
was retained within one year of the date of the Board's
decision which disallowed entitlement to service connection
for tarsal tunnel syndrome and denied an increased rating for
residuals of bilateral frozen feet.
In addition, the fee agreements signed by the attorney and by
the veteran-claimant in 1996 and 1997, meet the requirements
of 38 U.S.C.A. § 5904(d) (West 1991 & Supp. 1998) for payment
of the attorney by VA from the past-due benefits awarded to
the veteran. Under 38 U.S.C.A. § 5904(d) and 38 C.F.R.
§ 20.609(h) (1998), the following requirements must be met
for VA to pay the attorney's fee from past-due benefits:
(1) a copy of a fee agreement is in the veteran's file;
(2) past-due benefits are payable based on a favorable
resolution of the issue or issues previously before the
Board; (3) the total fee provided for in the agreement
(excluding expenses) does not exceed 20 percent of past-due
benefits; and (4) the amount of the fee must be wholly
contingent on whether or not the "matter" is resolved in a
manner favorable to the claimant.
In this case, the record reflects that the attorney filed the
latest, June 1997, fee agreement with the Board in July 1997.
Past-due benefits are payable based on the November 1998
rating decision, which granted service connection for tarsal
tunnel syndrome and assigned separate ratings of 10 percent
for each foot, and awarded an increased rating for residuals
of bilateral frozen feet, such benefits having been
previously denied by the Board in November 1995. The fee
agreement provides for 20 percent of the total amount of any
past-due benefits awarded on the basis of the veteran's claim
as the total fee for the attorney's services. Finally, the
agreement clearly indicates that the payment of attorney fees
is contingent on the award by VA of past-due benefits.
Consequently, the Board concludes that the requirements of 38
U.S.C.A. § 5904(d) and 38 C.F.R. § 20.609(h), for payment of
the attorney's fee by VA from past-due benefits, are met
concerning the past-due benefits resulting from the grant of
service connection for tarsal tunnel syndrome secondary to
bilateral frozen feet, and from award of an increased rating
for bilateral frozen feet. The amount of the attorney's fee
will be discussed below.
II. Claim for Service Connection for Trimalleolar Fracture
of the Left Ankle
It is also clear that the criteria for eligibility for
payment of attorney fees from past-due benefits awarded by
the RO for disability from trimalleolar fracture of the left
ankle have not been met. The veteran did not sustain the
ankle fracture until after the Board's November 1995
decision. The RO granted service connection for trimalleolar
fracture of the left ankle in November 1998 and awarded a 20
percent rating, effective from the date of the injury in
February 1997. Although the veteran became entitled to the
payment of past-due benefit for disability from trimalleolar
fracture of the left ankle, such benefits were not awarded
after any final decision by the Board concerning entitlement
to service connection for trimalleolar fracture of the left
ankle. The Board concludes that the attorney is not eligible
for the payment of attorney's fees from past-due benefits
awarded for disability from trimalleolar fracture of the left
ankle. Moreover, the Board notes that the terms of the 1996
and 1997 fee agreements filed with the Board do not include
representation before VA concerning this issue.
III. Fee Paid from Past-Due Benefits
Past-due benefits are defined in 38 C.F.R. § 20.609(h)(3) as
a nonrecurring payment resulting from a
benefit, or benefits, granted on appeal
or awarded on the basis of a claim
reopened after a denial by the Board . .
. or the lump sum payment which
represents the total amount of recurring
cash payments which accrued between the
effective date of the award, as
determined by applicable laws and
regulations, and the date of the grant of
the benefit by the agency of original
jurisdiction, the Board . . ., or an
appellate court.
In this case, the past-due benefits resulting from the
November 1998 rating decision involve a grant of service
connection and award of separate 10 percent ratings for
tarsal tunnel syndrome in each of the veteran's feet, for
which the attorney may receive 20 percent of the resulting
past-due benefits; a grant of service connection and a 20
percent rating for trimalleolar fracture of the left ankle,
for which the attorney may not receive 20 percent of the
resulting past-due benefits; and an award of an increased
rating of 50 percent for residuals of bilateral frozen feet
effective from November 16, 1992 to January 12, 1998, and
separate 30 percent ratings for each foot, effective from
January 12, 1998, for which the attorney may receive 20
percent of the resulting past-due benefits. The matter is
further complicated by the different effective dates of the
awards: November 16, 1992, for the 50 percent rating for
frozen feet; January 12, 1998, for separate 30 ratings for
residuals of frozen feet for each foot; and August 11, 1998,
for separate 10 percent ratings for each foot for tarsal
tunnel syndrome.
The regulation provides that the beginning date of the period
of past-due benefits is the effective date of the award,
i.e., November 16, 1992, for residuals of bilateral frozen
feet; January 12, 1998, for the separate 30 percent ratings
for each foot for residuals of frozen feet; and August 8,
1998, for separate 10 percent ratings for each foot for
tarsal tunnel syndrome. The regulation also provides that
the ending date for the period of past-due benefits is the
date of the rating decision, i.e., November 12, 1998.
Because the attorney may not receive payment from the past-
due benefits that resulted from the grant of service
connection and the award of a 10 percent disability
evaluation for the fracture of the left ankle, the difference
between the amount paid - based on the former disability
evaluation of 30 percent - and the amount due must be
calculated as if that award had not been made. The award of
the 50 percent rating for the residuals of frozen feet with
osteoarthritis and bone spurs from November 16, 1992 was not
affected by the later effective date of the grant of service
connection for the ankle fracture. When the evaluation for
the residuals of frozen feet was changed to separate 30
percent evaluations for the right and left lower extremity,
effective from January 12, 1998, that would have resulted in
a combined disability evaluation of 60 percent, based on the
combined rating table and application of the bilateral
factor. See 38 C.F.R. § 4.25 and 4.26 (1998). The addition
of the two separate 10 percent disability evaluations for the
tarsal tunnel syndrome of the right and left lower extremity,
effective from August 11, 1998, would have resulted in a
combined rating of 70 percent from that date, again based on
the combined rating table and application of the bilateral
factor.
Thus, the past-due benefits of which the attorney will
receive 20 percent are based on the difference between the
amount paid for the former 30 percent disability evaluation
and that which would be paid for the 50 percent evaluation
from November 11, 1992, a 60 percent combined evaluation from
January 12, 1998, and a 70 percent combined evaluation from
August 11, 1998. This, of course, differs from the actual
combined evaluations of 70 percent, effective from February
15, 1997, and 80 percent, effective from August 11, 1998,
which include the rating for the ankle fracture. Thus, the
amount paid to the attorney may differ from the amount
withheld by the RO pending the Board's decision on the
attorney's eligibility for payment.
IV. Effect of Termination of Representation Prior to Award
The veteran has asserted that the attorney should not be paid
a fee because she withdrew from his representation prior to
the date of November 1998 award. He has asserted that she
moved to a western state and suggested to the veteran that he
would be better represented if he had local counsel. The
attorney has submitted a letter in which the veteran advised
the attorney that he would not require her services after
June 18, 1998. The Board notes that the veteran appointed a
veteran's service organization as his representative on June
24, 1998.
The attorney fee agreement provides that if the veteran
discharges the attorney after the attorney has "fully
performed, substantially performed, or contributed
substantially to the results finally obtained" the fee would
still be owed as provided in the agreement. The Board notes
that the preponderance of the attorney's time and effort on
the veteran's behalf was expended prior to the veteran's June
1998 dismissal of the attorney. Although VA examinations
were conducted in August 1998, such examinations were
pursuant to the Board's remand-an action which resulted from
the attorney's successful efforts in representing the veteran
before the Court. Moreover, the attorney's accounting of her
time shows that she expended a considerable amount of time
before June 1998 in matters concerning the scheduling of
these examinations. The Board finds that the attorney had
substantially performed, and contributed substantially to the
results finally obtain.
Further, since the fee totals no more than 20 percent of
past-due benefits, it is presumed reasonable in the absence
of evidence to the contrary. See 38 C.F.R. § 20.609(f)
(1998). Nonetheless, the Board will consider whether the fee
is reasonable in fact.
Factors to be considered in evaluation the reasonableness of
a fee are set out at 38 C.F.R. § 20.609(e) and include the
following: (1) The extent and type of services the
representative performed; (2) the complexity of the case; (3)
the level of skill and competence required of the
representative in giving the services; (4) the amount of time
the representative spent on the case; (5) the results the
representative achieved, including the amount of any benefits
recovered; (6) the level of review to which the claim was
taken and the level of the review at which the representative
was retained; (7) rates charged by other representatives for
similar services; and (8) whether, and to what extent, the
payment of fees is contingent upon the results achieved.
As noted earlier, the payment of the fee was made entirely
contingent on the results achieve. Such an arrangement has
the effect of benefiting the veteran by enhancing access to
legal services. He was not required to pay a substantial
retainer or to pay attorney fees over the course of the long
pendency of the claim. The attorney assumed the entire risk
that her efforts might go uncompensated. Further, excellent
results were achieved. The veteran was granted service
connection for disabilities for which service connection had
been previously denied. He was also awarded a substantial
increase in benefits. The claim was moderately complex in
that it involved several issues and several disabilities.
The attorney has considerable legal experience and has
represented veterans exclusively for the past four years.
She expended a reasonable amount of time in representing the
veteran concerning these claims. The case had to be reviewed
by the Court prior to attaining the results achieved, a level
of review which required expertise beyond the abilities of
the veteran. The attorney spent a considerable amount of
time representing the veteran before VA and the Board. The
Board concludes that the attorney fee agreement is reasonable
in fact and that the fee should be paid as provided herein.
ORDER
Eligibility for payment directly by VA to the attorney for
services rendered before VA on the issues of entitlement to
service connection for tarsal tunnel syndrome and increased
rating for residuals of bilateral frozen feet with
osteoarthritis and heel spurs is established. The attorney
should be paid 20 percent of past-due benefits awarded the
veteran based on the difference between the amount paid for
the former 30 percent disability evaluation and that which
would be paid for the 50 percent evaluation from November 11,
1992, a 60 percent combined evaluation from January 12, 1998,
and a 70 percent combined evaluation from August 11, 1998.
Eligibility for payment of attorney fees from past-due
benefits awarded for trimalleolar fracture of the left ankle
is denied. None of the veteran's past-due benefits resulting
from the grant of service connection for trimalleolar
fracture of the left ankle by the rating decision of November
12, 1998, should be paid to the attorney.
MARY GALLAGHER
Member, Board of Veterans' Appeals